Rusal · RUS:RUAL

Rusal — United Company RUSAL — Q2 2013 Earnings Presentation

22 slides from Rusal's earnings presentation, Aug 19, 2013

  1. Slide 1: 2Q2013 Results Presentation

    2Q2013 Results Presentation 19 August 2013

  2. Slide 2: Disclaimer

    Disclaimer These materials and the subsequent discussion are not an offer for sale of any securities of United Company RUSAL Plc (the “Company”). The distribution of these materials in certain jurisdictions may be restricted by law and therefore persons into whose possession these materials come sho

  3. Slide 3: Operational and financial highlights

     Operational and financial highlights  Inefficient capacity curtailment program  Market update  Appendix Krasnoyarsk Aluminium Smelter. Casthouse 3

  4. Slide 4: 2Q 2013 highlights

    2Q 2013 highlights Top-line decrease following 8% drop in LME price slightly offset by higher premiums and product mix improvement  Revenue down by 6% in 2Q vs 1Q following 8% drop in LME aluminium price and almost flat sales volumes (+1% or 10Kt)  Record high realized premium of US$271/t achieved

  5. Slide 5: Production decreased in line with the capacity curtailment program

    Production decreased in line with the capacity curtailment program Aluminium & VAP production Kt 2,093Kt (4.5%) 1,999Kt 1,049 1,044 1,042 1 050 1,038 50% (1.5%) Record high 1,007 992 VAP share 1 000 45% 40% 40% 39% 43% 950 38% 40% 37% 900 35% 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 Aluminium

  6. Slide 6: Costs decrease despite slight physical sales growth

    Costs decrease despite slight physical sales growth Cost of sales USD/RUB exchange rate and oil prices US$m Aluminium $/bbl Oil Price (1) RUB/USD(1) RUB +1% 125 34.0 sales, kt (8.2%) QoQ 4.1% QoQ 120 33.0 2,250 2,196 165 (2%) 175 115 32.0 234 235 31.7 31.0 110 673 30.4 630 30.0 105 29.0 100 28.0 1,1

  7. Slide 7: Sharp LME price decline weighs heavily on operating margins

    Sharp LME price decline weighs heavily on operating margins EBITDA Bridge US$m Macro factors EBITDA (US$113m) margin 9.2% 11 EBITDA margin 14 6.9% 4 25 (25) 12 54 246 174 (167) 1Q2013 LME Exchange rate Sale Premium Energy Raw materials Quotation Period Increase in non-(1) Others 2Q2013 cash provisio

  8. Slide 8: Profitability affected by non-cash items

    Profitability affected by non-cash items Adjusted and Recurring Net Profit Reconciliation of Adjusted Net Profit US$m US$m 2Q 2013 1Q 2013 52 Net profit for the year adjusted (458) 19 1Q2013 2Q2013 for: (47) Share of profits and other gains and losses attributable to Norilsk 251 (99) Nickel, net of

  9. Slide 9: Net debt reduced by more than US$1Bn in 2Q2013

    Net debt reduced by more than US$1Bn in 2Q2013 Maintaining flexibility and decreasing debt load Current maturity profile(2)  Net Debt reduction by 9% since the beginning of US$bn 6.1 the year resulting from debt repayments and increased cash Secured by a  Total long-term debt repayments of US$1.1b

  10. Slide 10: Inefficient capacity curtailment program

     Operational and financial highlights  Inefficient capacity curtailment program  Market update  Appendix Novokuznetsk Aluminium Smelter. Potroom 10

  11. Slide 11: Expansion of the inefficient capacity curtailment program to improve costs and margins

    Expansion of the inefficient capacity curtailment program to improve costs and margins FY2012 Primary aluminium capacity reduction Aluminium smelter Production (Kt) 2013 Production cuts (1) Executed by  Expansion of the capacity curtailment program Volgograd (VgAZ) 168 All potlines Nov 2013 Tempora

  12. Slide 12: Market update

     Operational and financial highlights  Inefficient capacity curtailment program  Market update  Appendix Achinsk Alumina Refinery 12

  13. Slide 13: Aluminium consumption to grow on average 6% annually 2013 through 2015

    Aluminium consumption to grow on average 6% annually 2013 through 2015 Global aluminium consumption Key Regions Mt 50.1 54.2 57.7  We confirm the global aluminium demand 44.8 47.4 growth rate for 2013 at 6%. Largest 40.6 38.0 37.8 34.4 35.6 contributors still expected to be China, other Asian count

  14. Slide 14: North America. Expansion of aluminium demand in 1H2013

    North America. Expansion of aluminium demand in 1H2013 US Manufacturing PMI Housing starts in US (SAAR)(1) Highlights 2Q2013 1100  Primary aluminium demand was flat in 1000 2Q2013 on a YoY basis while growing 2% in the first half of the year vs 2012 900  Secondary aluminium alloys Th. units 800 pr

  15. Slide 15: Asia ex-China. Expecting a return to growth in 2H2013

    Asia ex-China(1). Expecting a return to growth in 2H2013 Japan Manufacturing PMI Housing starts in Japan Highlights 2Q2013 85  Primary aluminium consumption has slightly declined in 2Q2013 led by a 80 contraction in Japan Thousand houses 75  Japanese Government stimulus has not affected aluminium

  16. Slide 16: Europe. Signs of stabilizing from manufacturing

    Europe. Signs of stabilizing from manufacturing Manufacturing PMI Production index in Construction Highlights 2Q2013 110 EU28  European primary aluminium countries demand grew by 1.3% in 2Q2013 105 led by Turkey and Germany. In 100 1H2013 vs 1H2012, Turkey has increased consumption by 11% 95 while

  17. Slide 17: Aluminium premiums maintained their highs during 2Q2013

    Aluminium premiums maintained their highs during 2Q2013  Whilst warehouse incentives may be affected by the Aluminium premiums proposed LME regulations, premiums remain well US$/t Europe Japan US supported: Current(1) 300 283 Supply and demand balance 250 265  Market to remain very tight, with est

  18. Slide 18: China's aluminium industry: towards a well-balanced market

    China’s aluminium industry: towards a well- balanced market China’s operating capacity Al price and stocks dynamics in China Kt Kt US$/t 2 500 2 900 24,542 -1,002 1,435 70 25,045 2 800 2 000 -24% 2 700 1 500 2 600 1 000 2 500 500 2 400 0 2 300 Capacity 2012 Idled New Resumed Capacity Jun- commission

  19. Slide 19: Appendix

     Operational and financial highlights  Inefficient capacity curtailment program  Market update  Appendix Aluminium ingots 19

  20. Slide 20: Summary results: Income statement

    Summary results Income statement US$m 2Q 2013 1Q 2013 % Change Revenue 2,521 2,682 (6%) Cost of sales (2,196) (2,250) (2%) EBITDA 174 246 (29%) EBITDA Margin 7% 9% (2p.p.) Share of profits of associates and JVs 9 114 (92%) Income tax (51) (4) - Net Loss/Profit (458) 19 - Adjusted Net Loss (191) (47)

  21. Slide 21: Summary results: Balance Sheet and Cash Flow

    Summary results Balance Sheet and Cash Flow As at 30 As at 31 US$m % Change June 2013 Mar 2013 Cash and Cash Equivalents 566 299 89% Equity Attributable to Shareholders of the 9,517 10,434 (9%) Company Total Liabilities 13,421 14,334 (6%) Total working capital 1,878 1,928 (3%) Net Debt 9,882 10,968

  22. Slide 22: Summary results: Segment results

    Summary results Segment results 2Q 2013 1Q 2013 US$m Aluminium Alumina Aluminium Alumina Segment Revenue 2,202 482 2,324 515 Segment Results (EBIT) 135 (85) 230 (42) EBITDA 241 (63) 333 (13) EBITDA margin 11% (13%) 14% (3%) Segment CapEx 69 39 72 32 Segment cash cost per tonne 1,911 388 1,971 352 

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